climate change and the globalisation – china’s emissions and trade
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Climate Change and the Globalisation – China’s Emissions and Trade. Dr Tao Wang and Dr Jim Watson Tyndall Centre for Climate Change Research Sussex Energy Group, SPRU, University of Sussex CARIS and WB conference on Regional Integration University of Sussex, 14-15 th September 2009. - PowerPoint PPT PresentationTRANSCRIPT
Sussex Energy GroupSPRU - Science and Technology Policy Research
Climate Change and the Globalisation – China’s Emissions and Trade
Dr Tao Wang and Dr Jim WatsonTyndall Centre for Climate Change Research
Sussex Energy Group, SPRU, University of Sussex
CARIS and WB conference on Regional Integration
University of Sussex, 14-15th September 2009
Sussex Energy GroupSPRU - Science and Technology Policy Research
Climate Change: Developed Countries and Developing Countries’ perspectives
• Developed countries have the most responsibility as well as ability (political and economic), should take lead in reducing emissions, and help developing countries to transit to low carbon growth
• Developing countries are the most vulnerable to the consequences of climate change, yet will have the most contribution of the increase of carbon emission
• Is there a low carbon development path or society that successfully decarbonise in its development?
• How much the developed countries should be held responsible for the rise of carbon emission in developing countries?
Sussex Energy GroupSPRU - Science and Technology Policy Research
China’s position
As an emerging economy and trade power, China stands at
very forefront of this debate quickly moves on a road of high growth and high emission since 2000
long way to go for development and poverty eradication
environmental pollution threaten further development
58% of China's total export in 2006 is from the foreign venture industries in
China, and 70% FDI in China in 2006 goes to manufacturing
looking for alternative development path but cautious to potential risk
Sussex Energy GroupSPRU - Science and Technology Policy Research
• China has emerged as a major trading economy – with a rapidly growing trade surplus with the developed world, US and EU
• How much of China’s carbon footprint is due to its exports?
• The extent to which carbon emissions in China should be ‘owned’ by China has been the subject of much debate
Carbon embodied in Trade
The Emma Maersk
Sussex Energy GroupSPRU - Science and Technology Policy Research
0
200
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1990 1995 2000 2005
m t
on
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arb
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tC)
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Ex
po
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Carbon emissions Exports
Take-offs of China’s export and emission
Sussex Energy GroupSPRU - Science and Technology Policy Research
• Headline results:
– Emissions from exports in 2004 :1490 million tonnes of CO2
– Emissions avoided due to imports: 381 million tonnes of CO2
– 23% of China’s emissions due to net exports
• One reason is large (& growing) trade surplus: tripled between 2004 and 2005 to $102bn, rose again to $177 bn in 2006, and over $250bn in 2007
• Another reason is relatively high carbon intensity of Chinese economy. In 2000, the US produced 0.5 kg CO2 per dollar of economic activity whereas China produced 2.76kg per dollar
Who owns China’s emissions?
Sussex Energy GroupSPRU - Science and Technology Policy Research
Potential inaccuracies
1. using national average CO2 emission intensity of GDP
neglects the difference in emission intensities of different
goods
2. neglect the life cycle effects of producing and consumption of
goods and focus only on that happened at the custom
3. difficult to trace the trade via intermediate ports e.g. Hong
Kong and Singapore
4. processing trade, particularly within Asia
Sussex Energy GroupSPRU - Science and Technology Policy Research
In a worldwide context
It is only slightly less
than the total
emissions from Japan
in 2004, almost
Germany and
Australia combined,
and more than twice of
the UK emissions.
Japan
UKAustralia
US
China's total
China's Net Export
Germany
0
1000
2000
3000
4000
5000
6000
7000
CO
2 em
issi
on (
Mt)
2004
Sussex Energy GroupSPRU - Science and Technology Policy Research
The main categories of China’s trade
• First, low value-added, low energy and labour intensive goods
textile, machinery & electronics, footwear etc
major exporting sectors
major source of trade surplus as well as embodied CO2
• Second, energy and resource intensive products
base metals and related products
similar high volumes for both exports and imports
modest net import, substantial pollution and energy consumption,
large carbon exporter
Sussex Energy GroupSPRU - Science and Technology Policy Research
The main players of China’s trade
• Third, high-tech and high value-added products
chemical, transport and optical/precision equipment
net import
export largely stems from multinational companies’ plant in China
China still lack ability and capacity
• Fourth, natural resources and minerals
mineral, plastic and rubber
70% from mineral imports is crude oil
very large net import
Sussex Energy GroupSPRU - Science and Technology Policy Research
Source : WWF (2008)
Sussex Energy GroupSPRU - Science and Technology Policy Research
Imbalance of Carbon in Trade in 2001
Source : Peters and Hertwich (2008)
Sussex Energy GroupSPRU - Science and Technology Policy Research
Different Strategic Positions in World Trade
Balance of Embodied Emission
India
Russia
South Africa
SwedenGermany
UK
United States
CanadaBrazil
Poland
China China 2004
-1
-0.5
0
0.5
1
1.5
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2.5
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3.5
-600 -400 -200 0 200 400 600 800 1000 1200
Total CO2 emission in trade (Mt)
emis
sio
n im
bal
ance
in t
rad
e (k
g C
O2
/ 200
0 U
S$)
)
Sweden
Japan
Germany
United Kingdom
United States
Canada
Brazil
Poland
Australia
India
Russia
China
South Africa
China 2004
ExportImport
EmissionIntensive Export
EmissionIntensive Import
Japan
Australia
Sussex Energy GroupSPRU - Science and Technology Policy Research
Other similar researches
sources: Wang and Watson (2008)
Sussex Energy GroupSPRU - Science and Technology Policy Research
A heavier and heavier burden to China
• China is a resource scarce country (1/3 in land, 1/4 in water)
• Heavy industrialisation and manufacturing already made China
resource scarce, and spurred severe social and environmental
problems
• Cheap products export driven economy is not sustainable nor
stable
• Trade conflicts with other trade partners and fuels protectionism
in the West
Sussex Energy GroupSPRU - Science and Technology Policy Research
Low Carbon Society, or just Business as Before?
• China repeating old business: UK (19th Century), US (1st half 20th Century), Japan & Germany (1960s) and the Asian Tigers (1980s). Latest wave of industrial relocation is also emerging
• Economic growth driven by consuming, particularly relies on pulls of rich country’s over consumption, has to be changed
• Consumerism doesn’t increase welfare, over-debt the public in developed countries, create economic cycles, but appropriate resources needed for the poor’s development needs
• Challenges of Climate Change and Sustainable Development calls for a service based, not resource/material based economy
Sussex Energy GroupSPRU - Science and Technology Policy Research
Short-term solutions to address the problem
• Consumption based emission accounting– significant data requirements and lagging– very much rely on international agreement and collaboration– inconsistent to mainstream accounting system– business greening up its supply chain is a good start
• Sectoral approach for key sectors– rely on international collaboration and agreement– difficult to agree on benchmark standards– technology and finance support for developing countries’ industries– complementary not substitution– China’s embodied emission mainly from low emission sectors
Sussex Energy GroupSPRU - Science and Technology Policy Research
How to address the problem?
• Border carbon tariff or allowance– conflict with “common but differentiated responsibility” and WTO rules
– inefficient, huge administrative burden and not address carbon leakage
– ineffective, won’t change price and advantages of Chinese goods
– lobbied by heavy industries that China exports little or net-imports
• Low carbon technology transfer and diffusion– Use trade to promote low carbon products, technologies and services
– Carbon market and CDM to be scaled up
– Capacity building in developing countries
– Leverage from other sectors such as power
Sussex Energy GroupSPRU - Science and Technology Policy Research
Trade and climate policy to facilitate low carbon transition
• China’s heavy industry and export led economy need to be changed,
unsustainable both for China and its trade partners, both for global
environment and finance system
• An even more critical issue in today’s economic slowdown
Pressure for exporting countries to comprise environmental standards
Adverse impacts on consumers’ environment preference
Short term economic stimulation conflict with long term climate efforts
• Proactively pursue to harmonising the international trade and climate
policies
• Addressing the global economy driven by material-consumerism is a
must and a long term target that needs global efforts
Sussex Energy GroupSPRU - Science and Technology Policy Research
Thank You!
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